TOKYO, March 9, 2924—Goldman Sachs is closing down its Japanese banking operations, effective April 15, 2024, Bloomberg News reported March 8. Will it be a precursor to scaling back or pulling out of investment banking and other Japanese businesses is unclear.
Goldman Sachs Bank USA Tokyo Branch issued notice on the transaction banking services closing to its clients on Feb. 29, Bloomberg said. Goldman obtained its banking license in 2021, and in April 2023 it said it would offer payment and settlement, domestic/cross-border remittance services.
In Japan, wholesale banking services are by tradition performed with so-called ‘main bank’ financial institutions, making new entry extremely difficult no matter how competent a bank may be.
Goldman commenced transaction banking in the United States in 2020 and later expanded operations in the U.K., Germany, the Netherlands and other markets, Bloomberg said. The Japanese banking operation was to become Goldman’s first Asian banking footholds, it said. It was not clear whether Goldman would start offering banking services in other Asian markets.
Goldman is widely known to continue hanging on to its Japanese invest banking and securities businesses. Yet, even though the Japanese stock market is breaching new highs in recent weeks, there was little indications that Goldman would expand non-transaction banking operations. In November 2023, media reports said Goldman Japan president Masanori Mochida, who worked for Goldman for 38 years, had decided to retire at the end of 2023.
In an incongruous news story, the financial daily Nikkei newspaper Nov. 29, 2023 reported an interview article of Goldman’s global head of asset and wealth management Mark Nachman as saying that he plans to increase investment in Japanese companies and the property market with its investment banking division.
Nachman said his division would increase private equity investment in Japan, citing as an example of his resolve the privatization of the road-pavement leader Nippo jointly with ENEOS energy company group.
So, Goldman’s transaction banking business closing looks to be a deviation from its long-term business strategy in Japan, but it nevertheless is something one should not keep an eye off because the current ‘Japan boom’ is bed almost solely by the weak yen and the incidental stock market surge.
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